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description

Clorox's Brita skillfully exploits a tide of water safety concerns, growing a home water (filtration) business from inception to a 15% U.S. household penetration in ten years. The dilemma in the case arises as the period of increasing returns seems to be drawing to a close, and management must use its legacy, an installed based and a strong brand equity, to take the business forward into a less friendly environment. Students can model the relation between the primary demand for pitchers and the derived demand for filters to decide where they want to put future investments.

learning objective:

Allows students to explore the economics of acquisition and retention, installed base marketing, and lifetime customer value calculation.